Fintech is like a snowball on a hill that is getting bigger and bigger and changing finance tremendously. London-based entrepreneur Viktor Prokopenya is well acquainted with this scene; particularly with fintech’s ability to disrupt and democratise financial services. He believes that in the next five to 10 years, fintech and AI will profoundly alter the world in the same way as the advent of electricity.

From a niche concept to global buzzword, fintech has exploded over the past decade. In the span of just seven years, global investment has increased by a whopping 1,000%, topping $122 billion last year. And while some Luddites sought in the beginning to pour cold water on the disruptive potential of the technology, hardly a day passes without news that a new company – or government – unveils its own fintech product. For example, Bermuda’s government recently announced the creation of a new class of banks to serve fintech and blockchain organisations, while Saudi Arabia granted its first fintech licenses in July.

In the span of just seven years, global investment in fintech has increased by a whopping 1,000%, topping $122 billion last year.

But ever since the early days of fintech, London has emergedas a global hub, leaving in the dust other European rivals such as Paris and Berlin. A staggering 27 of this year’s “FinTech50”, the most game-changing fintech businesses in Europe, are headquartered in London. Despite initial worries that the looming threat of Brexit would cut into this lead, venture capital investment in London’s fintech industry more than doubled in 2017 vis-à-vis the previous year.

It’s a thriving scene that London-based entrepreneur Viktor Prokopenya, whom we recently sat down with, is well acquainted with. For Prokopenya, the “tech” part of fintech comes first. A former IT consultant, Prokopenya’s first entrepreneurial forays were in the world of software development; developing Viaden Media, the largest mobile app developer in Central and Eastern Europe. Prokpenya then moved into the venture capital sphere in 2012, founding his own investment firm, VP Capital.

Bent on sussing out the disruptors of tomorrow, Prokopenya made a conscious decision not to restrict the firm’s investments to specific industries, but rather to focus on what he saw as the essential elements of a successful business venture – a company with global reach and the potential to make a significant difference in the world, led by people who “have a deep understanding of their industry, who think about the world in unconventional ways”.

True to form, VP Capital’s very first investment, back in 2012 was in a fintech start-up called exp(capital), a company developing software for banks to accurately predict market fluctuations. While at the time it seemed like an esoteric choice for a first investment, Prokopenya’s bet paid off. Reflecting on what initially drew him to fintech, he remarked: “What is particularly exciting about fintech in my opinion is that it is using new technologies to democratise financial services, making them available to more people by lowering costs and barriers to access, which is having a positive impact on society at large. With smartphones becoming almost ubiquitous there is an opportunity to reinvent financial services by bringing them to people’s mobiles.”

The democratisation Prokopenya highlighted is one of the elements of fintech which investors and entrepreneurs are most excited about. As PayPal CEO Dan Schulman pointed out, two billion people around the world – including 70 million in the United States – live outside the mainstream financial system. Some of these people have no access to banking services at all; others rely on pawnshops or extortionate payday lenders, spending up to 10% of their disposable income on fees and interest rates.

As Prokopenya underscored, this gross inequality can be alleviated by the fintech innovations now flooding markets. In Kenya in 2006, for example, a paltry 27% of people had access to formal financial services. Thanks largely to the skyrocketing popularity of mobile money accounts, that figure has now increased to 75%, making Kenya the most financially inclusive country in Africa.

Fintech firms are springing up to help people in emerging economies do everything from sending electronic remittances to applying for an emergency loan from a mobile device. Some firms are particularly inventive – one, for example, uses satellite imagery of farmers’ fields to grant them credit and insurance from a distance. It’s exactly this sort of venture – at once a lucrative business opportunity and an initiative that disrupts the way people bank across the globe – that Prokopenya chooses to invest in.

Fintech firms are springing up to help people in emerging economies do everything from sending electronic remittances to applying for an emergency loan from a mobile device.

But disrupting long-established industries cannot be done with just one project. True innovation comes from stitching together different technologies and services and creating new products altogether. Which is why, in his more recent projects, Prokopenya has set his eyes on blending fintech with artificial intelligence (AI). Capital.com, a financial trading platform which The European Magazine has named the most innovative and most transparent broker in Europe, is one such example. One of Capital.com’s revolutionary features is its “Smart Feed” function, which detects traders’ innate cognitive biases – such as overconfidence – and helps them learn to overcome these biases to make better investment decisions.

The innovation which netted Capital.com such an award include the free educational app, Investmate, which accompanies its trading platform. Investmate offers amateur traders interactive courses and articles to help them pick up the tricks of the trade, brush up on finance basics or learn how to predict market trends. The app’s educational content is tailored to the traders’ level of experience and individual goals, part of Prokopenya’s mission to turn Capital.com into “the most personalised, user-friendly, easy-to-use, AI-backed trading platform.”

In his more recent projects, Prokopenya has set his eyes on blending fintech with artificial intelligence (AI).

Prokopenya is insistent that thanks to ongoing advances in computer power and machine learning, as well as the extent to which AI algorithms are more efficient than human processes, AI will continue to catalyse advances in fintech, drastically remaking the financial sector over the next couple of years. If Prokopenya’s predictions about the future seem ambitious — he believes that in the next 5 to 10 years, fintech and AI will profoundly alter the world in the same way as the advent of electricity – the sheer amount of capital flowing into the sector suggests that many of his fellow investors share his optimism.

Viktor Prokopenya, a London-based technological entrepreneur, venture capitalist, and AI advocate, sheds light on what the public tend to get wrong about the implications of machine learning algorithms. In collaboration with Larnabel Ventures, Viktor Prokopenya’s investment vehicle VP Capital announced that they would invest over $100 million in artificial intelligence startup businesses. They have already announced significant investments in a number of companies across a wide variety of industries.

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